Indian women borrowers have made significant contributions towards shaping the country’s credit landscape. Women have taken the lead in fostering a gender-inclusive world that provides equal opportunities and benefits for women across platforms and domains. Unsurprisingly, women borrowers in India have increased at a compound annual growth rate (CAGR) of 15% over the last five years compared to a CAGR growth of 11% for male borrowers as per recent data by TransUnion CIBIL. The share of women borrowers has increased from 25% in 2017 to 28% in 2022. This indicates that more and more women are realizing the potential of loans and credit cards to achieve their life goals.

Women leading as more conscious borrowers 

As more women enter the workforce and achieve financial independence, they are looking for credit opportunities to help them fulfil their aspirations. Between 2021 and 2022, the number of new self-monitoring women consumers has grown by 83%; Self-monitoring male consumers have grown at a rate of 60%. At 8.2 million self-monitoring women consumers in 2022, there is over 43%  growth in the number of self-monitoring women consumers in India.

As more women enter the labour force and achieve financial independence, they look for credit opportunities to help them achieve their life goals and aspirations. And this sentiment runs deeper than just the metro cities, as out of all self-monitoring women consumers, 60% were from non-metros. Additionally, the number of women from non-metros has increased by 7% in 2022 compared to 2021, showing increased awareness from this region.

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After checking their CIBIL Score, overall 45% of self-monitoring women consumers worked towards improving their credit profile (improving their CIBIL Score). Among the self-monitoring women consumers who improved their CIBIL Score, 28% improved their score by 20+ points.

The ecosystem is cheering them on 

While socioeconomic changes have contributed to the shift in women’s credit behaviour, banks and financial institutions have also played an important role. Lenders have traditionally checked a consumer’s credit profile, which includes the CIBIL Score and Reports, to determine loan eligibility and/or credit card application. In recent years, the increase in female consumers entering the credit landscape, as well as her awareness of the importance of maintaining a positive credit profile, has worked in her favour.

As a result, more and more lenders are creating loans and credit card offerings that are specifically aimed at the woman consumer. These are adding an impetus to the Indian woman’s growing use of credit, her loan choices and her credit awareness.

Paving the way to financial freedom: Maintaining a high credit score

Easy access to credit plays a big role in enabling financial freedom, and with credit awareness on the rise, women are showcasing a conscious effort towards leveraging credit and fulfilling their financial goals. Monitoring and maintaining a high credit score is important, especially because the higher your score, the better the chances of loan approval. Here are 3 key steps you can take to build and maintain a high credit score and move towards financial freedom:

Step 1: Leverage your credit opportunities carefully.

  • Apply for credit cautiously and don’t exceed more than 30% of your credit limit. While you may have many lenders offering you a variety of different credit cards and loan opportunities, always remember to apply for new loans in moderation. This helps lenders know that you are not always credit-hungry.
  • Maintain a carefully balanced mix of secured (such as home loans and auto loans) and unsecured loans (such as personal loans, consumer durables and credit cards).
  • Don’t exceed more than 30% of your credit limit. Just because you have a credit card, you don’t have to maximize the credit utilization limit. Control your utilization and don’t go overboard. 

Also Read: Four credit traps you should know to help safeguard your credit profile

Step 2: Pay on time, every single time.

  • Always remember to pay your credit card invoices and EMIs on time, every single time. A single late payment can snowball into a much larger amount just because you missed the payment due date and it now attracts interest and late payment fees. This is also viewed negatively by lenders. 

Step 3: Monitor your credit score and profile regularly.

  • Someone else’s negligence could affect your credit score as well as your access to credit when you need it. If you have stood as a co-signer or guarantor for someone else’s loan, ensure you monitor all co-signed, guaranteed and joint accounts You can be held equally liable for any missed payments in these accounts.
  • Monitor your CIBIL Score and Report regularly. If you notice any incorrect information or misrepresentation, highlight these inaccuracies, rather than get an unpleasant surprise in the form of a rejected loan application. A high score also allows you to be loan-ready when the opportunity arises.

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Women are making a difference in the evolving credit landscape, and a healthy credit profile goes a long way in securing access to future loans and credit cards to make their dreams a reality. With credit at her fingertips and a credit-conscious profile, there is nothing she cannot achieve. 

The author of this column is Sujata Ahlawat, Senior Vice President and Head of Direct-to-Consumer Interactive, TransUnion CIBIL.

(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of http://www.financialexpress.com)